Posted on 9/17/2007, 7:46:01 PM by SirLinksalot
Should you even bother?
For many high-school seniors, this week isn't just the beginning of the academic year. It's also the start of the college-application season, and that means filling out financial-aid forms.
But for many families with hefty incomes or sizable wealth, applying for aid will be a wasted effort. Here's a look at who likely won't qualify.
Facing rejection You can get a handle on your aid eligibility by heading to www.collegeboard.com and playing with the College Board's Expected Family Contribution, or EFC, calculator.
The key concept: If your EFC is below a college's total annual cost, you will get help from the college or the federal government in bridging the gap. We're talking here about aid based on financial need. If your daughter is a basketball-playing piano prodigy with 2400 SATs, she might receive a merit award, even if you're rolling in dough.
So will you receive needs-based aid? Imagine you don't own your home, have no savings and just one child. With $90,000 in pretax income, your EFC would be around $13,000 a year, which is the average cost for an in-state student at a public institution.
In other words, if your kid went to a college costing $13,000 a year, you would probably get little or no aid. This EFC is based on the "institutional methodology" used by many colleges.
If your income is $150,000, your EFC would be above $30,000, which is the average cost for a private four-year college. Got $210,000? Your EFC might be $48,000, which means you likely won't get aid, even if your kid goes to one of the country's most expensive private colleges.
If you have two children in college at the same time, your odds of getting some aid are far better. Your EFC would be around $13,000 per child at $120,000 in income, roughly $30,000 per child at $220,000 and it wouldn't hit $48,000 until your income got above $300,000.
Remember, however, we are talking about income alone. What if you have, say, $500,000 in investments sitting in a regular taxable account?
If you had one child in college and your income was $130,000, your EFC might be $47,000, which means you are unlikely to get aid, no matter where your child goes to college. Similarly, at $250,000 in income and with two children in college, your EFC would be some $47,000 per child. Again, you would likely be out of luck.
If your EFC is just $10,000 or $20,000 above a college's cost, "you should probably apply the first year," says Myra Smith, the College Board's executive director of financial-aid services. "You should give it a shot. But you should also come to grips with the fact that, even if you get financial aid, you'll still have to pay a lot."
Moreover, the aid you receive may not be grant money. "At many schools, the first aid you will get is a subsidized Stafford loan," notes Sandy Baum, an economics professor at Skidmore College in Saratoga Springs, N.Y.
Applying anyway With the College Board's calculator, you can get results using not only the institutional methodology, but also the government's federal methodology.
The federal formula ignores home equity, while colleges often take it into account, though they may cap the amount considered. Both formulas ignore retirement accounts, so don't include these sums when listing your investments in the College Board calculator. Some colleges, however, may consider 401(k)s and their ilk when doling out aid.
Even if you have no chance of receiving aid, you should fill out the federal-aid form if you want to be eligible for the government's unsubsidized Stafford loan program. Similarly, if you don't expect aid now but think you will be eligible when your second child applies in two years, you may want to file the aid forms. Some colleges also require students seeking merit aid to file first for needs-based aid.
In addition, apply for aid if you have extenuating circumstances. If you have high medical costs, if your income will be lower in the years ahead, or if you're incurring hefty expenses looking after elderly parents, you may receive aid, even if the formulas suggest otherwise.
Federal Government subsidizing Colleges and Universities while Colleges and Universities continue to raise tuition so the Federal Government can subsidize some more. I love the government trouth. /s
Out of curiosity, how would they even know if you were telling the truth or not?
Took me less than a half hour to fill out the forms and I received a $4000 loan in a little over a month. What’s the whinning about? Freakin’ youngsters, lazy as hell.....
You have to show proof of income.
the way liberal garbage has taken over most universities one begins to wonder whether college itself is worth the bother...
These colleges and Universities are swimming in money and still charging these outrageous amounts It’s really quite sickening. These are the same liberals that berate the capitalist model but never miss a chance to get their tickets punched.
I believe if you can get into Harvard, your education might be practically paid for by FULL FINANCIAL AID.
Their endownment is about $30 Billion dollars.
So am I supposed to feel sorry for a family that makes $210,000 a year, has $500,000 in assets, and hasn’t planned ahead to pay for the postsecondary education of their own children by saving the dough in a tax-free vehicle like a 529 plan????? Next I’ll be asked to shed a tear for Bill Gates and how much it costs him to heat his 20,000 sq. ft mansion.
beware - the information in the FAFSA may wind up in the hands of state and federal taxing authorities. Speaking from bitter personal experience WRT to California....
I am a little confused here. The student seeking financial help is required to identify a parental unit, and most likely a patriarchial parental unit, with his or her college submission. The parental units income is then adjudged to determine the 18 year olds need for college funding. Funny me, I thought an 18 year old was considered a free standing legal entity under law. Curiously, when colleges seeking fed funding comes into the mix, the 18 year old is merely chattel of the lord and lady’s estate. Funny how this works given all the outrage of the PC crowd to diversity. One would think they, college students, would want to be judged based on their merit and not their families income or station. LIberals, when will you practice what you preach?
I am just giving you a data point here. I have friends who make nearly that amount in SF and NYC - and it barely makes for a low middle class lifestyle due to the cost of living...
I think one would be surprised at how little aid they or any other schools dish out. They’ll jump up for a politically correct cause but showing up in a financial bind will just get you a big debt when you graduate. My son had three kids and three jobs and he still owed about $20,000 in student loans at a state school.
Many private schools use a form called the CSS/Financial Aid PROFILE and might also require the filing of a FAFSA.
There’s no information required for filing a FAFSA that the IRS and state revenue agency doesn’t already know. The FAFSA is based on information on your 1040.
It’s a little old philosophy that goes back to the idea that you are responsible for the education of your own rugrats, not mine. Society gives you K-12, any more is up to you.
The cost of education is totally unconscionable and warrants a huge fraud investigation. The damage that our so-called educators are doing to the nation may be the greatest act of treason ever.
I guess I’d move then.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.